Most Powerful Women in Finance: No. 10, JPMorgan Chase's Joyce Chang
Global Head of Research, J.P. Morgan
Robots won't be taking the jobs of investment bank research analysts anytime soon, but Joyce Chang sees a future in which the combination of artificial intelligence, big data and machine learning fundamentally transform the kind of information investors use to make decisions.
Chang has pushed hard for the investment banking unit of JPMorgan Chase to invest in AI and big data strategies. She established its "Quant Council" and led the development of a new 300-page primer on the changes that technology will impose on investors — whether they realize it or not.
"Analysts, portfolio managers, traders and CIOs will eventually have to become familiar with big data and machine learning approaches to investing," said Chang, who oversees 950 analysts around the world covering more than 3,700 companies. "This applies to both fundamental and quantitative investors, and is true across all asset classes."
Returns will suffer for investors who fail to adapt, she said. "As more investors adopt alternative datasets, the market will start reacting faster and will increasingly anticipate traditional or 'old' data sources." Quarterly earnings reports and macro data from the government will lose their predictive value, once the use of big data becomes standard, she said.
That doesn't mean traditional research will lose its place in investing. In fact, the sheer volume of data bombarding investors these days makes the job of analysts more important, Chang argued. "With 80% of the data in the world created in the last two years, judgment matters more than ever," she said. "Technology is a complement to sound judgment and knowledge, not a substitute."